retail news in context, analysis with attitude

Published on: September 28, 2010

CHARLOTTE, N.C. -- Want an enthusiasm infusion?

Try spending time with about 800 women, all of whom are passionate about their careers, their companies, and the industry in which they work.

That’s the scene here, where the Network of Executive Women (NEW) has convened with record attendance for its Leadership Summit 2010. Last evening was just the beginning, but the brio with which the women seem to be embracing every moment seems remarkable. And there seems to be a genuine feeling of...well, sisterhood, that binds them together. I’ve not been to one of these national meetings before, and I must admit that the enthusiasm is almost startling. Not to mention contagious.

Ironically, NEW kicks off its Leadership Summit as the New York Times reports on a Government Accountability Office (GAO) study saying that over the past decade, women actually have made little progress climbing the management ladder. “As of 2007, the latest year for which comprehensive data on managers was available, women accounted for about 40 percent of managers in the United States work force,” the Times writes. “In 2000, women held 39 percent of management positions. Outside of management, women held 49 percent of the jobs in both years.”

Meanwhile, women are making some progress on the salary front, as “the gap between what men and women earn has shrunk over the last few decades. Full-time women workers closed the gap to 80.2 cents for every dollar earned by men in 2009, up from just 62.3 cents in 1979 ... Across the work force, the pay gap was also slightly wider for managers who had children. Managers who were mothers earned 79 cents of every dollar paid to managers who were fathers, after adjusting for things like age and education. This gap has stayed the same since at least 2000.”

The GAO study also indicates that “on average, female managers had less education, were younger and were more likely to be working part time than their male counterparts,” according to the Times.

What this means is that NEW needs to be - and in fact aims to be - far more than a cheering section. There is serious work to be done here, especially if the implications of the GAO study are true, and the exceptional talent in the room last night is being undervalued and under-compensated.

Here’s a hopeful stat. Over the past half-dozen years or so, NEW has raised through a variety of means some $70,000 that has been used to fund a number of scholarships to women pursuing careers in the retailing and consumer products industries. This year, both through fund raising and an auction here, it is expected that NEW will begin closing in on $100,000.

One of the most interesting people I met here was Lashawndra Lawrence, one of three recipients of this year’s scholarships. She’s scheduled to graduate from Tuskegee University next May with a Masters degree in food science. Her goal is to become a research chef for a major food company and develop health, affordable food products to be used in treating chronic illnesses and preventing obesity.

I have to admit that I was glad to see that not everyone sees business advancement as emanating from an MBA.

(I was also glad to see something else. Because I’m speaking in one of NEW’s sessions today, I was treated to the frankly heart-warming sight of virtually every attendee walking around carrying a copy of “The Big Picture: Essential Business Lessons from the Movies,” which was co-authored by Michael Sansolo and me. For an author, there is no more thrilling sight.)

More tomorrow...

Published on: September 28, 2010

by Michael Sansolo

In the hunt to build our message with customers, we all love to reach for an example that helps explain our case. Heck, we do that constantly here at MNB. The problem, of course, is that some lessons are far better than others. Let me explain…

I love magazines and their ongoing business struggles concern me. Well-crafted magazines can present a depth of information and understanding that is unparalleled by other forms of media. And certainly there are some magazines still flourishing, but the overall combination of short attention spans and reduced advertising budgets are walloping most of the publishing industry these days.

So the magazine industry is responding with eye-catching ads designed to tout the strength of its products. One ad looked like a ransom note, using magazine titles to form the sentences. Another featured a provocative photo (is there any other kind) of Lady Gaga. And now there is one asking a simple question: Will the Internet kill magazines? Did instant coffee kill coffee?

That last one got me thinking and with a little searching, I found that the better lesson on coffee is the very opposite of what the ad promised. Rather, it’s a lesson about what can happen to a product when its core offering is attacked and instant varieties weren’t the cause. In the early 1960s, the average American drank three cups of coffee each day and nearly all was fresh brewed. Twenty years later, instant had grown but coffee consumption was down nearly one cup a day overall. These days (another 20 years down the road), consumption is even lower, with “gourmet” coffee having basically replaced only some of the lost cups.

According to coffee industry websites, most of the decline was caused by crop problems in Brazil in the early 1970s, not to the growth of instant products. The problems drove up prices and drove down supplies of the best tasting coffee. In essence the product cost more and tasted weaker and the result was a movement of drinkers away from coffee. Despite all the Starbucks on all the street corners, coffee consumption remains historically low.

Interestingly, there are parallels for magazines and supermarkets (and many other products). While both industries arguably have better products and services than ever, they are facing consumers who doesn’t get it or want to get it. Today’s younger generations grew up finding information from easy sources like television and now the internet, much as they grew up getting simple meals from fast food providers. Cooking and reading…that seems hard. Only both can and should be very enjoyable.

I thought about a presentation I did recently with Calvin Mayne of Dorothy Lane Markets in Dayton, OH. Calvin’s stores are anything but typical, but no one should lightly dismiss what makes them work. It’s the passion for food that runs through the Mayne family, the DLM staff and even the customers. DLM uses education to teach shoppers about new products, recipes and tastes. Calvin explains how education and creative merchandising made a product like Manchego cheese essential, when years before no one knew it existed. A little education and a little merchandising excitement can change the value equation and in turn breathe life back into products and categories.

You can think of other examples like it. An educated consumer becomes a better customer because they better understand the value they receive and appreciate it more.

It strikes me that provocative photos of Lady Gaga aren’t special and certainly don’t make a great argument for buying a magazine. Somehow the publishing industry has to figure out how to outflank the immediacy and mostly shallow nature of internet news. (Maybe they should read MNB.) Likewise, supermarkets have to understand that an endless parade of price merchandising doesn’t drive additional supermarket consumption. Yes, we have to serve what the shopper values, but we also have teach them what they might aspire to value and serve that too.

That strikes me as a more winning example.

Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com . His new book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available by clicking here .

Published on: September 28, 2010

Still using traditional methods to reach your customers?

Consider this.

Harris Interactive is out with a new study saying that eight percent of Americans currently use an e-reader, and that 12 percent of people who don;t plan to buy one within the next six months.

Now, that adds up to just one in five customers. Which may not seem like a lot. However, the study also says that the 53 percent of the people who own e-readers read more books during the past six months than people without e-readers.

In other words, the people who adopt e-reader technology actually tend to be the publishing industry’s best customers.

The growing popularity of e-reader technology is borne out by a story from Bloomberg saying that “book sales in the U.S. fell for the first time in six months in July as revenue from printed titles tumbled and purchases of digital books soared. Overall revenue declined 1.3 percent to $1.5 billion in July from a year earlier, the Association of American Publishers said in an e-mailed statement. The group collects sales figures from more than 300 U.S. publishers. Revenue from adult paperback titles, the largest category, sank 10 percent to $111.1 million. Digital-book sales more than doubled to $40.8 million.”

In other words, the tides are changing.

The question is, how many other traditional business methodologies will be swept away by these shifting tides? The shift to e-readers in the book category almost certainly will affect how people consume other printed materials, like newspapers and magazines. Just this week, the New Yorker - one of the most text-intensive magazines out there - announced it was coming with an iPad edition that will be made more robust with videos and other interactive features developed for the technology.

Businesses that depend on traditional information delivery methods for their ads, coupons, etc... need to start considering and planning for the implications of these shifts now.

To do otherwise would be to forge ahead with business strategies and tactics that may be out of touch with what consumers want and how they behave.

And that’s my Tuesday Eye-Opener.

- Kevin Coupe

Published on: September 28, 2010

Unilever-owned Ben & Jerry’s announced yesterday that it will no longer use the phrase “all natural” on any of its labels, bowing to pressure from the Center for Science in the Public Interest (CSPI).

As reported here on MNB back in August, CSPI had pointed out that “at least 48 out of 53 flavors of Ben & Jerry’s 'All Natural' ice cream and frozen yogurt contain alkalized cocoa, corn syrup, partially hydrogenated soybean oil, or other ingredients that either don’t exist in nature or that have been chemically modified.”

The company originally said it was adhering to all federal guidelines in its labeling policies, but now is making the change to avoid confusion and, in all likelihood, controversy that might sully its brand equity.

CSPI points out that there is no formal Food and Drug Administration (FDA) definition of “all natural.”

Published on: September 28, 2010

The Orlando Sentinel reports that the Florida Board of Education is planning to pass legislation that would ban the sale of sugary beverages - including chocolate milk - in public schools.

Hearings are scheduled to be held over the next two months, and the bill will get discussion and consideration in December.

"When you think about it, we probably have a million overweight or obese children in our schools," said John Padget, a board member. "I think the clock is ticking in terms of personal health."

According to the story, “One reason the board chose to move forward was the realization that the federal government make take years to revamp its rules on what foods should and shouldn't be allowed to be sold in elementary-, middle- and high schools.

“Also, board members learned that the Washington D.C. school district recently announced it is cutting out flavored milk, which tends to be high in sugar.”

Published on: September 28, 2010

• Walmart yesterday announced that it has made a $4.6 billion (US) bid to acquire the South African wholesaler Massmart Holdings, and that the two companies have entered into negotiations in the hope of making a deal. Published reports not that Massmart has a variety of store formats and brands throughout the sub-Saharan region; Walmart reportedly has been looking for a platform on the continent that will allow it to expand elsewhere in Africa.

Published on: September 28, 2010

The Wall Street Journal reports that Nestlé plans to spend as much as $500 million (US) over the coming decade “to produce more food and drink products with health benefits, a high-margin segment that has proved controversial with regulators and consumers.

“Nestlé created two new units, Nestlé Health Science SA and the Nestlé Institute of Health Sciences, that will deepen its use of nutritional and pharmaceutical research to develop products that may prevent and treat chronic ailments such as diabetes, obesity and Alzheimer's disease, all of which are expected to be major contributors to rising health-care costs in coming years.”

Published on: September 28, 2010

The New York Times this morning reports that the US Federal Trade Commission (FTC) is charging that Pom Wonderful, described as “the pricey and popular pomegranate juice sold in the distinctly curvaceous bottle” that is said to help reduce the risk of heart disease, prostate cancer and impotence, actually is making “making false and unsubstantiated claims about the power of their pomegranate elixir.”

According to the story, “In a complaint that seeks to prevent the company from making any further medical claims unless they are substantiated by the Food and Drug Administration, the commission said the company ignored evidence that contradicted its claims that the juice could help prevent or treat heart disease, reduce the risk of prostate cancer and overcome erectile dysfunction.”

Pom Wonderful reportedly plans to contest the charges, saying that it has “spent $34 million on pomegranate research, including 19 clinical trials and multiple studies published in peer-reviewed journals.”

“It’s a shame that the government is unable to understand this fundamental distinction,” the company said in a statement, “and instead is wasting taxpayer resources to persecute the pomegranate.”

Published on: September 28, 2010

• The Safe Quality Food Institute (SQFI), a division of the Food Marketing Institute (FMI), and the Global Food Safety Forum (GFSF) have announced their first collaborative effort will be a food safety training program held in conjunction with the China International Food Safety and Quality Conference and Expo in Shanghai on November 8. GFSF will host a one-day workshop for Chinese companies, focusing on the Chinese livestock and meat processing industries. SQFI will host a detailed class on implementing the SQF 1000 and 2000 standards.

• Crain’s Chicago Business reports that McDonald’s is planning a revitalization of its milk shake line, “trying to revive sales of the creamy drink by adding a cherry-topped version to its McCafé line, alongside hot-selling frappes and smoothies.

“In Chicago and a handful of other test markets, the Oak Brook-based chain is updating its chocolate, vanilla and strawberry Triple Thick Shakes with a whipped cream garnish and serving them in clear plastic McCafé cups.” A national rollout is scheduled to begin in October.

• The Food Marketing Institute (FMI) announced that it is teaming up with the National Retail Federation (NRF) and eBay to tackle the growing problem of organized retail crime. This relationship strengthens the partnership and provides for even greater collaboration and information sharing in an ongoing effort to support the investigative efforts of the Federal Bureau of Investigation as well as state and local law enforcement agencies working in partnership with grocery loss prevention professionals. 

• In Minnesota, the Star Tribune reports that “Cargill Inc. said Friday that it has agreed to pay $350 million for Unilever's Brazilian tomato products business, which includes a processing plant and major tomato sauce brands.

“The deal brings the Minnetonka-based agribusiness giant into the tomato sauce business for the first time. It will also be Cargill's largest acquisition in Brazil since it started operating there in 1965.”

• As expected, Unilever is acquiring Alberto Culver Co., which makes products such as TRESemme, VO5 and Noxzema, for $3.7 billion.

Published on: September 28, 2010

Responding to the spate of stories recently about supermarkets being located in regional malls, MNB user Geoff Harper wrote:

Grocery stores in malls died in the 1960’s and 1970’s.  Why?  Because the mall customer is buying non-perishable items and is not going home in the next hour.  With Whole Foods and Aldi now going to malls, I’d be interested to know where they are located in the mall and what plans the mall owners have to (as you say) change the mall into an attractive shopping experience.  If that can happen, then the mall idea may make sense.  If not, the stores will not last long.

MNB user Louis A. Scudere wrote:

What’s old is new again. Supermarkets tried to co-locate in/with malls in the early/mid eighties with limited success and tended to move away from such strategies as it was realized that while a good supermarket location would always be a good mall/general merchandise location, it was not a two way street. However, having said that, the three formats that exist right now that could, possibly, benefit from such a strategy would  IMHO be high end such as Whole Foods, mid scale limited assortment, such as Aldi’s, and upscale limited assortment such as Trader Joe’s.
 
I am familiar with the Whole Foods location in the “Streets of Woodfield” section of the Woodfield Mall shopping complex in suburban Chicago. It is in a very high traffic location, too much in my opinion, thus I suspect that ingress/egress is very much a challenge at this location. The fact that Mariano’s Fresh Market opened about 3 miles to the northwest has probably not helped their situation appreciably. Therein lies the problem with mall co-location. While mall locations offer a draw of regional nature, the fact of the matter is that grocery shopping still teds to be governed by convenience, thus, in an all things being equal situation (ala Whole Foods and Mariano’s, to the Whole Foods folks I am not saying they are equal, but I will say that Mariano’s offers a very viable alternative, with similar product offerings, and feel, in their power aisle) the more convenient location will win out. A variation on this theme is Aldi’s, strategy of placing locations within ½ mile of Wal-Mart supercenters. This has appeared to have some level of success, at least in the Southeastern US. The other issue typically with mall real estate is that it tends to be very expensive relative to alternative supermarket locations, therefore driving a unit’s breakeven point higher and leaving it vulnerable to competitive moves on its periphery.
 
Given, all of the above, coupled with the basic fact that (while this old saw has eroded somewhat in the past 30 years it is still true) the majority of the consuming public does not like to by their pants and their peas in the same place, while the so-called nascent trend is interesting, I wouldn’t be holding my breath looking for a new supermarket to pop up at the local mall any time soon.

MNB user Steve Paris wrote:

This is common in other parts of the world, especially in developing markets where large scale “modern” shopping outlets tend to be grouped as a destination.  There is no reason why this can’t work in the U.S., and in fact, might give traditional grocers with a strong identity and proposition a chance to compete even more effectively with the Targets & Wal-Marts of the world by offering a different type of “one-stop” shop.  Sadly, though for those chains stuck in the middle strategically (we all know who they are), it will not help them long term and might even be a distraction from recognizing what they need to do to fix their businesses.




On another subject, this from an MNB user:

Below is the summary you shared of how the OECD thinks we can decrease childhood obesity. 
 
“Among the OECD recommendations for how to deal with this crisis - and the report makes no bones about the fact that this is a crisis, both from an economic and health care point of view - is the use of ‘health-promotion campaigns, compulsory food labeling and a serious commitment from the food industry to stop advertising unhealthy foods to kids.’

Sorry, but, in my opinion, this is just pathetic reasoning.  I grew up in the era (mid-50’s) when child-oriented food advertising on TV was all junk food.  And proud of it.  Sugar Corn Pops are tops.  Sugar Jets (how many parents had to nail the 2nd floor screens shut so children wouldn’t attempt to fly out the windows).  M&M’s jumping in the “swimming pool” to come out all candy coated.  I think, next to sugar-coated cereals, candy bars were the most advertised foods for children on TV.

Were any of us obese?  Not by a long shot.  It was all our parents could do to keep us at the breakfast table long enough to swish down the sugar laden cereal.  There were at least 5-6 kids already on your back porch waiting impatiently for you to come out and play.  Once you were outside, you would move to the next house until we had everyone rounded up.  Then, it was one physical activity after another.  Red rover.  All day tag.  Kick ball.  Riding bikes.  Jumping rope. Jumping off garage roof tops.  Climbing trees.  Roller skating on bumpy sidewalks w/the skates that fit on your shoes w/the skate key that you wore around your neck.  Cowboys and Indians (in addition to the skate key, no self-respecting kid, girl or boy, was w/o their handy, cap-loaded, six-shooter in holster).  Rainy days were pure hell if your parents wouldn’t let you play outside in the rain.

Even after dark, we would congregate under streetlights for 30 scatter or kick the can.  We all had numerous cuts/bruises on our shins from all the things we would trip/fall over in the dark while running around.  And then onto catching lightening bugs in the empty peanut butter jar. 

In the winter, we would sled ride until our clothes were soaked rather than go back in the house.  There was a crick at the bottom of the hill; only if your sled carried you into the crick would you consider going inside.  Every yard had an igloo and a snowman.  Some had forts for the snowball fights.

We all walked to school and back, including lunch time, since our schools didn’t have cafeterias.  For me, that was 4 miles daily at age 6.  Outdoor recess was a daily given.  How could any of us  be obese?  In retrospect, if we hadn’t consumed all that sugar, we would probably have collapsed from lack of enough calories to get us through the day.  Compare that to today’s children’s daily “activities”, and I use the word loosely.
 
So, as I read their conclusion stated above, it almost, again in my opinion, defies logic that this is what they conclude are the weapons to fight childhood obesity.

All of your comments are right on the money, except for one thing.

We don’t live in the 50s anymore. Those rules don’t apply.

It is a fantasy to think that we live in an age when kids will walk long distances to school and play outside at night. Not in an age of Amber Alerts.

Is it a shame? Of course. But it also is reality. And I think as much as we’d like to see a return to some of the values and behaviors of 50 years ago, it is delusional to think it can happen, and that this will somehow solve the obesity crisis. (Besides, not everything about the 50s was all that great. Hindsight can be a little misty-eyed.)

Do our kids need to get more exercise and spend less time in front of various electronic boxes? Sure. But that doesn’t mean that “health-promotion campaigns, compulsory food labeling and a serious commitment from the food industry to stop advertising unhealthy foods to kids” are all bad ideas.

We have to deal with reality here. 2010 reality.




Got this nice note from MNB user Alison Kenney Paul regarding yesterday’s Eye-Opener about Ted Williams and the tissue-thin difference between being good and great:

As a keen observer of all things consumer, I couldn’t agree with you more….Ted Williams surprised and delighted fans with his easy athleticism and desire to win.  John Updike did the same by choosing just the right words to convey an event, a nuance, a feeling.

We have that opportunity every day—to communicate and inspire, connect and delight….thanks for the reminder!

And MNB user Steven Ritchey wrote:

The year Ted Williams hit over .400 for the season, he was in a bit of a slump at the end of the season.  The last day of the season was a double  header, his manager offered to let him sit as  his average was right at .400 and a bad day at the plate would mean he wouldn’t hit  his milestone .400 average for the season.  To Williams credit  he said, &*%$^ no, he played both games collected a few hits and raised his average a few points.  My dad (who was a disappointed semipro baseball player) told me several stories over the years about Ted Williams, I don’t know if they are true or not, but he was a fascinating ball player.

Character is always a critical factor in success.

Another MNB user wrote:

One point you missed, is Ted Williams was not appreciated to the extent that he should have been. The year he hit 4.06 he was not named MVP.   Truly it could be said that as a hitter he may have been the best ever.

It's the same in business.  Many of the very best employees are not recognized because they don't patronize the boss.  They just go about doing their jobs, making the company a success.  It is our job as leaders to recognize them, and surround them with great teammates.




Finally, on the subject of whether I am too nice and write too much about Walmart, I got this email from an MNB user:

Interesting reading the viewer's position on unsubscribing due to your handling of Wal-Mart as a topic.  I had half drafted a note to you that day and dropped the matter.  The gist of my note was how telling your infatuation with Wal-Mart was.  You have increasingly waved their banner just layered with gushing praise.  If one did not know better, one would think they had paid for a novel and unorthodox advertising program or, more likely, being sweet on them has clouded your journalistic judgement.

In any event, I would probably be in the camp that considers that not very good form for the venue you have here.  While I would not go so far as to unsubscribe, your commentaries on this topic, I would say, are getting a bit caustic to your own program.  After reading about your disenchanted reader, I thought I would mention my similar reaction to your handling of the Walmart topic (though your site is not seen either as a tool for "fighting" Walmart.   Just realize the Walmart love affair has gotten more pronounced to others and it can rankle on many levels...). I wonder, like consumer complaints that get written, how many more pass quietly unvoiced.

For the record, best I can remember, I have posted every email critical about how I have handled Walmart.

I try to post every email that criticizes me, or at least all the ones that are coherent.

I honestly cannot figure out how to handle the Walmart situation better. I criticize them when I think they make a mistake, and I praise them when I think they do the right thing. And I try to report on what the company does when it makes news. I thought - and continue to think - that I’ve been fair.

One thing is for sure. Walmart has never paid me so much as a penny for “a novel and unorthodox advertising program.” Frankly, I have no idea if the folks in Bentonville care what I think or write.

But I’ll pay attention, and keep trying to do my best.

Published on: September 28, 2010

In Monday Night Football action, the Chicago Bears defeated the Green Bay Packers 20-17.